Greek Politics After the Vote

Greece’s parliament may have passed legislation to satisfy its official creditors, but the vote doesn’t end the uncertainty. The mood in the legislature on Sunday night suggests another question: How committed are Greece’s political leaders to the reforms they passed?

As 199 deputies in the 300-seat parliament voted in favor of the legislation, 43 deputies from the two main parties voted against their leaders’ orders and were subsequently thrown out of the parties.

With Greek politics in flux and elections set to take place in April, the question remains whether Greece’s future prime minister and his deputies will continue to throw their weight behind implementing the overhaul of the Greek economy and state administration.

Advertisement

The conservative New Democracy party and its leader Antonis Samaras, who support the caretaker government led by Lucas Papademos, are set to win the elections in April. Yet New Democracy saw 21 of its own deputies defect, bringing his control of parliament seats down from 83 to 62.

The socialist Pasok party, winner of the last elections in 2009, saw 22 defections and now has 131 deputies in parliament after its leader and former prime minister George Papandreou, who fell from grace when he called for a surprise referendum in November, also removed the defectors from party ranks. Pasok is in the midst of an internal leadership struggle that may see current finance minister Evangelos Venizelos become chief.

In the short-run, the concern is commitment. Mr Papandreou will undoubtedly support the program — the main question is over Mr Samaras.

Here’s European Union economics commissioner Olli Rehn welcoming on Monday the outcome of the Greek vote:

“The correction of the serious imbalances affecting the Greek economy and the restoration of the conditions for growth and jobs are a long-term endeavor. It will still take time and effort by the Greek society. The EU continues to stand by the Greek people. The Greek authorities and political forces should now take full ownership and make the case for the second program, and then fully implement it, in order to ensure the return of the country to sustainable economic growth and jobs.”

Mr. Papademos certainly offered this on Sunday night, speaking just minutes before the crucial vote:

“We have before a complete and reliable economic program (for the) exit from the fiscal and financial crisis in the country. A program that ensures, like nothing else, our position in the euro. That averts a disastrous bankruptcy. It is a tough program that brings painful sacrifices for a very wide set of social strata, almost for the totality of our society, on top of sacrifices already made. But it’s a program that will put us on a strong footing and will lead to the necessary reform and recovery of our economy so that we can overcome the crisis and transition to growth and job creation.”

What of Mr Samaras? Was his support full and unequivocal? Here’s how he concluded his own speech in parliament just before the vote Sunday.

“I want to avoid the jump over the cliff today, to buy time, to restore normality and to go to elections tomorrow. This is why I ask you to vote in favor of the new loan agreement today and to have the ability tomorrow to negotiate and to change the current policy which has been forced on us. But to change [the policy] we must exist as a country, as society and as a democracy. I’m not asking you to vote in favor of the wrong recipe. I was the first to reject it and I stand by that. But I’m asking you to walk away from the edge of the cliff and to fight together tomorrow.”

The equivocation may encourage the troika of official-sector creditors to insist on receiving clear support for the measures by Mr Samaras. Mr Papademos can only guarantee what happens until the day of the election, after that, the troika will have to find a way to negotiate with the conservative leader.

Beyond that, the 43 Greek deputies from New Democracy and Pasok that opposed the new measures are now the third largest “party” in the Greek parliament and join the leftist and nationalist parliamentary parties in opposition.

This can hardly be reassuring to those hoping for broad political support and “full ownership” of the program. And it isn’t only a short-term question: Greece’s financing program lasts until 2015 and the memorandum of understanding passed in the Greek parliament says that the euro-zone has pledged to continue funding the country “for as long as it takes” until it can return to the market to borrow for itself.

Comments (4 of 4)

" This is why I ask you to vote in favor of the new loan agreement today and to have the ability tomorrow to negotiate and to change the current policy which has been forced on us. But to change [the policy] we must exist as a country, as society and as a democracy. I’m not asking you to vote in favor of the wrong recipe. I was the first to reject it and I stand by that. But I’m asking you to walk away from the edge of the cliff and to fight together tomorrow.”
Get the bailout now and change the terms after the election.

9:21 pm February 14, 2012

Lawrence Fuller wrote:

The Greek Parliament and governmental charade is like a Greek Trajedy on steroids.
Is the Greek government fooling anyone? Maybe, the EU Commissioners, the German
government, the French government and the private debt holders who are about to make
a euro 100 Billion contribution 'voluntarily' to the Greek welfare state.

8:28 am February 14, 2012

William J McKibbin wrote:

Imagine if these same Greek austerity measures were imposed upon a defaulting California or New York -- more at:

Greece is what austerity looks like, and US voters are starting to warm up to austerity -- what we see happening in Greece, Portugal, Italy, and Spain is a taste of what could be coming to certain US states in the near future -- California, New York, Rhode Island, and others should take note...

5:35 pm February 13, 2012

Pennsylvania Farmer wrote:

So long as Greece has a balance of payments problem with the rest of the world, this will continue. For as long that runs negative, it does not matter what austerity programs they put in place. Washington, are you listening?? Thought not.

About Real Time Brussels

The Wall Street Journal’s Brussels blog is produced by the Brussels bureau of The Wall Street Journal and Dow Jones Newswires. The bureau has been headed since 2009 by Stephen Fidler, who was previously a correspondent and editor for the Financial Times and Reuters. Also posting regularly: Matthew Dalton, Viktoria Dendrinou, Tom Fairless, Naftali Bendavid, Laurence Norman, Gabriele Steinhauser and Valentina Pop.